Geopolitics Quarterly

Geopolitics Quarterly

Geopolitical Dynamics and their Impact on Emerging Markets

Document Type : Original Article

Authors
Rabiul Islam 1
Sabina Sultana 2
Md. Ariful Islam 3
Md. Nazmus Sadekin 4
Gazi Abu Horaira 1
1 School of International Studies, University Utara Malaysia, Sintok, 06010, Kedah, Malaysia.
2 School of Languages, Civilization and Philosophy, University Utara Malaysia, Sintok, 06010, Kedah, Malaysia.
3 Department of Economics, Islamic University, 7003, Kushtia, Bangladesh.
4 Department of Economics, Mawlana Bhashani Science and Technology University, 1902, Santos, Tangail, Bangladesh
10.22034/igq.2025.287340.1510
Abstract
Emerging markets are those developing countries that are not fully developed but moving away from the traditional economies to be more industrialized by adopting a free and open market or mixed economy. Fast economic growth, growing middle-class, huge population growth  and working age population, as well as consumption growth are attracted the multinationals to invest in emerging markets. Despite of its opportunities, these emerging markets also bring out the risks that must be faced and overcome by multinationals through its strategies and approaches. Qualitative research has been used for this study. This paper will try to evaluate the emerging markets from its governance, rule of law, politics, market and corporate sectors, as well as its institutions and regulations, while taking BRICS countries as example to represent the emerging markets. The findings shows that emerging markets are attractive yet still has issues that mostly on its governance, political stability, rule of law, corruption, and institutional voids. Thus, multinational firms could undertake this challenges by implementing right strategies and approaches based on each markets domestic features, using the five context to recognize the institutional voids, and refer to the Analyze-Benchmarck-Calibrate of developing a globalization strategy.
Keywords
Emerging Markets, BRICS, Multinational Firms, Emerging Market Index

Subjects

1.       A Framework for Strategists Assessing Emerging Markets. (2015). Harvard Business Review.
2.       Abidin, I.S.Z; Haseeb, M; Chiat, L.W; Islam, R. (2016). Determinants of Malaysia – BRICS Trade Linkages: Gravity Model Approach. Investment Management and Financial Innovation, 13(2): 1-10.
3.       Accenture, R. (2008). China in the Multi Polar World 2008 and India in the Multi Polar World 2007.
4.       Agrawal, G. (2015). Foreign Direct Investment and Economic Growth in BRICS Economies: A Panel Data Analysis. Journal of Economics, Business, and Management, Vol. 3 No. 4: 421–424.
5.       Alshammari, S.D; Islam, R. (2014). Analysis of International Marketing Strategy among Malaysian Exporters. Advances in Natural and Applied Sciences, 8(8): 1-13.
6.       Amadeo, K. (2020). Emerging market countries and their five defining characteristics, viewed 05 March 2021, from https://www.thebalance.com/ what-are-emergingmarkets-3305927.
7.       Arnold, D.G; Bowie, N.E. (2003). Sweatshops and respect for persons. Business Ethics Quarterly, 13(2): 221–242.
8.       Aulakh, P.S; Kotabe, M; Sahay, A. (1996). Trust and performance in cross-border marketing partnerships: a behavioral approach. Journal of International Business Studies, Vol. 27 No. 5, pp. 1005-1032.
9.       Aybar, B; Thirunavukkarasu, A. (2005). Emerging market multinationals: an analysis of performance and risk characteristics. Journal of Asia-Pacific Business, 6(2): 5 – 39.
10.   Boubaker, S; Nguyen, D.K. (2014). Corporate Governance in Emerging Markets: Theories, Practices and Cases, Springer Verlag, 2014.
11.   BRICS. (2020). Countryeconomy.Com. Retrieved December 5, 2020, from https://countryeconomy.com/countries/groups/brics.
12.   Bruner, R.F; Conroy, R.M;  Li, W; O’Halloran, E.F; Lleras, M.P. (2003). Investing in Emerging Markets (R. Mitchell, Ed.). The Research Foundation of AIMR.
13.   Business Insights on Emering Markets (2019). OECD Development Centre.
14.   Cerar, M. (2009). The Relationship Between Law and Politics. Annual Survey of International & Comparative Law, 15(1).
15.   Corruption Perception Index (2019). Transparency International.Countries ranked by CPIA trade rating (1=low to 6=high). Retrieved December 8, 2020, from https://www.indexmundi.com/facts/indicators/IQ.CPA.TRAD.XQ/ rankings.
16.   Dadush, U; Shaw, W. (2011). How Emerging Markets are Reshaping Globalization. Carneige Endowment for International Peace.
17.   De Soto, H. (2000). The mystery of capital. Black Swan.
18.   Dijk, P. Van. (2018). Dealing with institutional voids in emerging markets: A small and medium sized enterprise perspective. Radboud Universiteit Nijmegen.
19.   Garten, J.E. (1996). The big emerging markets. The Columbia Journal of World Business, Volume 31, Issue 2, Summer 1996, Pages 6-31.
20.   Giddens, A. (2010). Climate Change Meets Geopolitical Reality in Copenhagen. New Perspectives Quarterly, 27: 58 – 60.
21.   Goldstein, A. (2007). Multinational companies from emerging economies. Palgrave McMillan: New York.
22.   Haller, A. (2016). Globalisation, Multinational Companies and Emerging Markets (July 13, 2016). Ecoforum, Vol. 5, Issue 1(8), 2016, Available at SSRN: https://ssrn.com/abstract=3002002
23.   Hili, E; Gooneratne, R; Laupretre, B; Phua, W.L; Zarruk, L. (2014). The Truth about Investing in Emerging Markets.
24.   Hult, T. (2009). The BRIC Countries. Global Edge Business Review, 3, No.4.
25.   Islam, R; Patwary, A.K. (2013). Factors Influencing to the Policy and Strategies used to Disabled Employment in Hospitality Industry. Advances in Environmental Biology, 7(9): 2598-2605.
26.   Islam, R; Ghani, A.B.A; Kusuma, B; Theseira, B.B. (2016). Education and Human Capital Effect on Malaysian Economic Growth. International Journal of Economics and Financial Issues, 6(4): 1722-1728.
27.   Islam, R; Islam, M.F; Sultana, S; Horaira, G.A. (2024). Interplay of poverty, unemployment, education, and technology: Insights from Malaysia’s economic development strategies. Journal of Infrastructure, Policy and Development, 8(10): 6357- 6377.
28.   Jones, G. (2017). Globalizing Latin American Beauty." ReVista: Harvard Review of Latin America, 16(3) (Spring): 10–14.
29.   Jordaan, V.A. (2006). Facilitators course on multi-grade teaching. Facilitators guide with resources. Bloemfontein: Free State Department of Education.
30.   Kaufmann, D; Kraay, A; Mastruzzi, M. (2010). The Worldwide Governance Indicators: Methodology and Analytical Issues. The World Bank Development Reesearch Group, Policy Research Working Paper 5430.
31.   Keohane, R.O. (2004). Governance in a Partially Globalized World. In Power and Governance in a Partially Globalized World. Taylor & Francis.
32.   Khanna, T; Palepu, K.G. (1997). Why Focused Strategies May Be Wrong for Emerging Markets. [Article]. Harvard Business Review, 75(4), 41-51.
33.   Khanna, T; Palepu, K.G. (2010). Winning in emerging markets: a road map for strategy and execution. Boston, Mass.: Harvard Business Press.
34.   Khanna, T; Palepu, K.G; Sinha, J. (2005). Strategies that fit emerging markets. Harvard Business Review, 83, 6–15.
35.   Krause, M. (2020). Institutional Quality Index 2020. Friedrich Naumann Foundation.
36.   Kurakin, A; Sukharenko, A. (2018). Anti-Corruption in the BRICS Countries. BRICS Law Journal, V(1), 56–77. https://doi.org/10.21684/2412-2343-2017-5-1-56-77.
37.   London, T; Hart, S.L. (2004). Reinventing strategies for emerging markets: beyond the transnational model. Journal of International Business Studies, Vol. 35, Issue 5, 350-370.
38.   Mall, S; Panigrahi, T.R. (2019). Capital Markets & Economic Growth: A Tale of BRICS Countries. Journal of Applied Business and Economics, 21(6), Article 6. https://doi.org/10.33423/jabe.v21i6.2404.
39.   Manktelow, A. (2014). Guide To Emerging Markets: the business outlook, opportunities and obstacles. London: The Economist.
40.   Meyer, J.W; Scott, W.R. (Eds.). (1983). Organizational environments: Ritual and rationality. Beverly Hills, CA: Sage.
41.   Meyer, K. (2004). Perspectives on multinational enterprises in emerging economies. Journal of International Business Studies, Vol. 35, Issue 4, 259-276.
42.   Mody, A. (2004). What Is an Emerging Market? International Monetary Fund, No.WP/04/177.
43.   North, D.C. (1990). Institutions, Institutional Change, and Economic Performance. Cambridge: Cambridge University Press.
44.   Paul, J. (2015). The mirage of marketing to the maximum: new measures. Asia Pacific Journal of Marketing & Logistics, Vol. 27 No. 4, pp. 1-15.
45.   Pilania, R.K. (2009). Multinationals and Emerging Markets. Vol. 10, No. 2, 100–103. https://doi.org/10.1108/17515630910942232.
46.   Political Risk Map (2020). Retrieved December 6, 2020, from https://www.  marsh.com/us/insights/research/political-risk-map-2020.html.
47.   Raiston, G; Mee, K. (2019). A new approach to investing in emerging markets. Schroders.
48.   Ramamurti, R. (2004). Developing Countries and MNEs: Extending and Enriching the Research Agenda. Journal of International Business Studies, 35(4): 277–283. http://www.jstor.org/stable/3875131.
49.   Richmond, R. (2015). Trade network centrality and the currency carry trade, Working Paper UCLA Anderson School of Management.
50.   Ritzer, G. (2011). Mcdonaldizarea societății [original title McDOnaldization of Society], Bucharest: SNSPA & Pine Forge Press (Imprint of SAGE).
51.   Rottig, D. (2016). Institutions and emerging markets: effects and implications for multinational corporations. International Journal of Emerging Markets, Vol. 11 No. 1, pp. 2-17. https://doi.org/10.1108/IJoEM-12-2015-0248.
52.   Rule of Law Index (2019). World Justice Project.
53.   Sakarya, S; Eckman, M; Hyllegard, K.H. (2007), “Market selection for international expansion: assessing opportunities in emerging markets”, International Marketing Review, Vol. 24 No. 2, pp. 208-238.
54.   Salacuse, J.W. (1999). From Developing Countries to Emerging Markets: A Changing Role for Law in the Third World. The International Lawyer, Vol. 33, No. 4, 875–890.
55.   Santos, J.F; Williamson, P.J. (2015), “The new mission for multi-nationals”, MIT Sloan Management Review, Vol. 56 No. 4, p. 45.
56.   Scott, W.R. (2014). Institutions and Organizations (4th ed.). Thousand Oaks, CA: Sage Publications.
57.   Selznick, P. (1957). Leadership in administration: A sociological interpretation. Evanston, IL: Row Peterson.
58.   Sen, A. (1999). Development as Freedom. Oxford: Oxford University Press.
59.   Smith-Bingham, R. (2016). Resilience Amid Disorder: Steering a Path through Social and Political Unrest. Marsh & McLennan Companies.
60.   Sraders, A. (2020). What Are Emerging Markets? Characteristics and List. TheStreet. Retrieved December 4, 2020, from https://www.thestreet.com/ markets/emerging-markets/what-are-emerging-markets-14819803.
61.   Staff, I. (2020). Emerging Market Economy Definition. Investopedia. Retrieved November 22, 2020, from https://www.investopedia.com/terms/e/ emergingmarketeconomy.asp.
62.   Strategies That Fit Emerging Markets. (2005). Harvard Business Review. https://hbr.org/2005/06/strategies-that-fit-emerging-markets.
63.   Sunje, A; Civi, E. (2012). Emerging markets: A review of conceptual frameworks, Unpublished Manuscript.
64.   The Case for Emerging Markets. (2019). Franklin Templeton.
65.   Tutor2u. (2020). BUSS4—Three Ways to Evaluate Emerging Markets (https://www.tutor2u.net/) [Text/html]. Tutor2u; Business | tutor2u. https://www.tutor2u.net/business/blog/three-ways-to-evaluate-emerging-markets.
66.   UKEssays (2018). The Impact of Online Shopping on Society Information Technology Essay. November 2018. https://www.ukessays.com/essays/ information-technology/the-impact-of-online-shopping-on-society-informa- tion-technology-essay.php?vref=1.
67.   UNCTAD (2007). World Investment Report, 2007, pp. 271‐4, available at: www.unctad.org/Templates/webflyer.asp?docid=9001&intItemID=4361&lang=1&mode=downloads (accessed June 12, 2020).
68.   Viteritti, J.P. (2008). Why Governance Matters. In When Mayors Take Charge: School Governance in the City. Brookings Institution Press.
69.   Waldron, J. (2020). The Rule of Law. In E. N. Zalta (Ed.), The Stanford Encyclopedia of Philosophy (Summer 2020). Metaphysics Research Lab, Stanford University. https://plato.stanford.edu/archives/sum2020/entries/ rule-of-law/.
70.   Westney, D.E. (1993). Institutionalization Theory and the Multinational Corporation in S. Ghoshal and D.E. Westney (Eds) Organization Theory and the Multinational Corporation: 53–75, New York: St. Martin’s Press.
71.   Zhao, M; Park, S; Zhou, N. (2014). MNC Strategy and Social Adaptation in Emerging Markets. Journal of International Business Studies. 45: 842–861.
Geopolitics Quarterly
Volume 21, Issue 4
Winter 2025
Pages 341-372

  • Receive Date 22 May 2021
  • Revise Date 18 November 2021
  • Accept Date 09 July 2025